He conceded climate change had been a "politically difficult issue" for Labor but the party had decided the best policy for tackling global warming was an emissions trading scheme.

The combined value of the world's ETS markets was more than $30 billion, covering almost a quarter of global greenhouse gas emissions and economies ranging from Mexico to California and parts of China.

Australia made international headlines earlier in July when the government became the first country in the world to unwind its carbon pricing scheme.

Mr Shorten described the decision as regrettable but said the more serious risk was that Australia would suffer "damaging economic isolation" as the world moved to take collective action on climate change.

"It will not be long before a lack of climate policy is an obstacle to finalising trade deals," he said.

"In fact, it is entirely possible that trade negotiations will mandate an effective price on carbon to ensure a level trading field."